Amazon Faces FTC Lawsuit for Using Manipulative Tactics to Enroll Customers in ‘Prime’ Subscription

The Federal Trade Commission has filed a lawsuit against for tricking customers into signing up for the company’s Amazon Prime Program.

Lina Khan, FTC Chairperson, stated that Amazon tricked and trapped people into subscribing to recurring subscriptions. It not only annoyed users but also cost them money.

The writing was on the wall for Amazon the day that Khan was confirmed by the Senate. Her career has been made by her criticism of Amazon, and the company demanded her recusal from any FTC action taken against it. That didn’t work, and she’s now going after Amazon’s most profitable program.

Amazon is attempting to trick customers into signing up for Prime. You may accidentally sign up for Amazon Prime if you do not read the site carefully.

At least I knew what I was getting into.

Wall Street Journal

Amazon’s spokesperson dismissed FTC claims as “false, in terms of law and fact”. ”

According to the complaint, Amazon used “manipulative and coercive interfaces” (known as dark patterns) to trick Prime subscribers into renewing automatically.

According to the FTC, Amazon leadership either rejected or slowed changes that would have made Prime cancellation easier for customers because they negatively affected Amazon’s bottom line.

The FTC has been investigating the use of dark patterns in online commerce for several years. This tactic encourages users into taking actions that may be beneficial to the company, but not necessarily for the user.

Amazon is best known for its dark patterns, but other companies like Vonage are also guilty. According to the WSJ, “Vonage paid a $100 million settlement to the FTC last year after it was accused of preventing customers from canceling their internet-based telephone service and charging them unexpected termination fees.”

Amazon made signing up for Prime easy with just a few clicks, according to the FTC. They created a “four-page, six-click, 15-option cancellation process” which they internally referred to as “the Iliad Flow”, in reference to Homer’s epic of the Trojan War.

According to the FTC’s complaint, Amazon had redesigned the cancellation process for Prime members shortly before it filed the lawsuit. They claimed that Amazon knew of their “legally unjustifiable policies”.

Some services conceal third-party billing by hiding the link to the billing company. The FTC should take this issue up.

JP Morgan estimates 72% of American households have Amazon Prime. The WSJ reported that a Prime membership in 2022 would cost $1100 if sold separately. JPMorgan predicted 270 million Prime members around the world by 2022.

Big Tech has many advantages and services. They should be punished for not following the rules.